Investment winners of 2025 at a glance

Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Equities

2025 was a great year for stock markets around the world. All the major regions delivered double digit gains - the first time this has happened since 2019.

Emerging markets came out on top, delivering growth of roughly a quarter. This is something of a surprise. At the beginning of the year, it seemed that emerging market economies would be crippled by US tariffs, given their reliance on exports to developed nations.

• Read: Investing in emerging markets – three fund picks

The levies have proved less damaging than feared, however. A flurry of trade deals has helped, but the fall in the US dollar has also enticed investors. A weaker greenback helps because:

• it improves the spending power of Asian consumers
• reduces the region’s imported inflation
• lessens the burden of dollar-denominated debt;
• boosts the price of commodities, a key export for many emerging markets

The rise of emerging markets - together with the success of European and UK indices - represents a profound shift in investor thinking. Over the past decade, US equities have led the pack, achieving an average annual return of 15%. This year, however, North America has lagged behind other regions.

• Read: Is it time for investor to look beyond the US?

Investors are growing nervous about the S&P 500’s high valuation and its extreme skew towards the technology sector. Concerns about the US economy - particularly the direction of inflation -is also weighing on sentiment.

Cash

Cash proved a reliable bet in 2025, delivering returns of roughly 4.5%. Personal investors made the most of this: the Fidelity Cash Fund was by far our best-selling fund of the year.

Interest rates in the UK and the US are on a downward trajectory, however. The Federal Reserve cut rates to between 3.5% and 3.75% in December - a three-year low1. Meanwhile, the Bank of England is expected to announce a fourth rate cut on 18 December2, which would take the UK base rate to 3.75%2.

• Read: Cash ISA overhaul: what can savers do now?

Where rates will go in 2026 is slightly less clear. Analysts at Barclays predict many central banks will ‘stay on hold’ next year, with only ‘selective’ policy easing (for example, in the UK) or tightening (for example, in Japan)3.

Consensus forecasts suggest the UK base rate will settle at 3.25% in 20264.As ever, though, the Bank of England will have to balance the threat of inflation with the damage caused by slow economic growth.

Bitcoin

Investing in crypto is a roller coaster ride. Bitcoin - the world’s first cryptocurrency - fell sharply this year, meaning it is back at the bottom of our performance table. This follows two years of chart-topping growth.

The reason behind the sell-off, which started to unfold in October, is not particularly clear. Some blame it on shifting interest rate forecasts. Highly speculative assets like crypto tend to do better when rates are low, as investors struggle to get good returns from safe assets. News that Japan could raise interest rates this month was not well received, therefore.

• Read: Can I invest in cryptocurrency within my ISA?

Others have attributed the fall to Big Tech bubble fears, saying nervousness is spilling over into other asset classes.

For now, however, Bitcoin’s relationship with the wider financial universe is still nebulous. While some commentators have warned that the sell-off is a harbinger of bigger market problems5, others say it’s just crypto being crypto.

Commodities

Commodities also have a habit of bouncing around. 2022 was a stellar period for the asset class, because Russia’s invasion of Ukraine caused the price of oil to shoot up. The following year, oil, gas and wheat all fell sharply6, and commodities languished at the bottom of the table. 2025 was less dramatic - although it heavily depends on what type of commodity you focus on.  

The oil price has been under pressure this year due to increased production. This has dented profits at energy giants like Shell and BP7.

In contrast, gold is on a tear. Central banks have been stocking up on the yellow metal and, more recently, retail investors piled in, drawn to gold’s ‘safe haven’ qualities and its seemingly unstoppable rise. Silver has also been a stand-out performer.

As a result, lots of investors have been buying metal-focused exchange traded funds (ETFs)⁸, which are listed on stock exchanges and bought and sold like shares. The best will mirror movements in metal prices very closely and do so for a low charge. Examples include iShares Physical Gold, which features on Fidelity’s Select 50.

• Select 50: our favourite funds - selected by experts

Another way to gain exposure to this asset class is by investing in the companies that extract, produce or distribute commodities. For example, Ninety One Global Gold, another fund on the Select 50, invests predominantly in gold-mining companies listed around the world.

Property

Property can be a useful diversifier in an investment portfolio. However, the asset class hates high interest rates, as they make mortgages and other forms of borrowing more expensive. If you’re a real estate investment trust (REIT), with a host of commercial and residential property holdings, this is bad news for cash flow. High rates can also weigh on how many properties are bought and sold.

• Read: What exactly is a REIT and can I hold it in my SIPP or ISA?

This has been a problem for several years now and has prompted some institutional investors to reduce their real estate holdings, according to new research9.  

Listed housebuilders have also been under pressure this year, with the likes of Taylor Wimpey and Barratt Redrow reporting slower sales.

Bonds

Government bonds - also known as gilts in the UK and Treasuries in America - are issued by countries to fund public spending. Generally speaking, bonds have the power to generate good income, but they the lack rockstar appeal of equities. This is reflected in the returns of recent years.

Here in the UK, the gilt market has had a somewhat choppy 2025. Bond yields - which move inversely to bond prices - are proving stubbornly high. Investors had their eyes fixed on the gilt market during the Autumn Budget, fearful that government policies could stoke inflation - the arch enemy of bonds. However, the market appears to have stabilised, and many investors are breathing a sigh of relief as the year draws to a close.

Source:

^1,5,6,7 FT.com
²Bank of England
³Barclays live
⁴FactSet
⁸World Gold Council. 15.12.25
⁹Hodes Weill & Associates, L.P

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Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall. Investments in emerging markets can be more volatile than other more developed markets. Overseas investments will be affected by movements in currency exchange rates. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.